Monzo said its annual losses doubled and added the coronavirus pandemic raised concerns about the digital bank’s ability to continue as a “going concern”.
The fintech posted an annual post-tax loss of £113.8m in its 2020 accounts, up from the £47.1m of losses it posted last year, as it hired new staff and launched in the US.
The app-only lender, founded in 2015, said revenues more than tripled to £67.2m from £19.7m, as the business grew to hold more than 4.4 million customer accounts.
However, the bank said that if the ongoing health crisis continues, it would “expect to see sustained adverse impacts on income due to lower transaction and lending volumes”.
Pandemic leads to lower revenues
It added this material uncertainty would “cast significant doubt upon the group’s ability to continue as a going concern”.
The bank said: “The group is loss making and our revenue streams have been significantly impacted by the COVID-19 pandemic and resulting macro-economic uncertainty.”
It added: “Regulatory reviews will also lead to stricter financial crime requirements. This may result in lower forecasted customer numbers and revenues, along with increased costs associated with correcting areas of concern.”
The London-based bank has had a tough year. Last month, Monzo’s saw its valuation slump 40% to £1.25bn as part of a £60m funding round for the London-based business. Swiss fund Reference Capital and Vanderbilt University were among the investors who took part in the round.
Monzo’s US launch
The fintech was previously valued at more than £2bn last year when it raised £113m from US startup “accelerator” Y Combinator.
Also in June, Monzo laid off 120 staff to weather the crisis and earlier this year closed a customer support office in Las Vegas.
In May, Monzo announced that co-founder Tom Blomfield (pictured) would step down as chief executive, to be replaced by new US chief executive TS Anil. The former Visa executive will take over day-to-day operations in Britain and the US, while Blomfield moved to the newly-created post of president to focus on new products.